NFL could be in big financial trouble

Training camps opened another year of new possibilities. The Cleveland Browns franchise, which Forbes ranked as the 20th most valuable NFL team, was sold for $1 billion, showing impressive value in NFL teams. The league was coming off last year's Super Bowl, which was won by the country's biggest market and set a new all-time record for TV viewers.

And then, last week, the dominoes started to fall.

Alterra America Insurance, one of the NFL's casualty insurers, announced that it was asking the New York State Supreme Court to declare that Alterra isn't liable for covering any damages related to concussion lawsuits. This was apparently just the first public acknowledgement of a larger problem and, on Thursday, word came that the NFL is suing 32 of its former insurers, all of whom are also trying to escape liability for concussion litigation.

In essence, the NFL could be on the hook for damages if it loses what is potentially the most important court case in its history.

The concussion lawsuit, not yet filed, was recently consolidated from dozens of separate lawsuits into one case, encompassing about 2,400 former NFL players. By the time the case is tried, it's believed the number of plaintiffs could swell to 5,000 of the about 12,000 retired NFL players.

Given the number of plaintiffs, their public image and the debilitating effects alleged in the lawsuit, the potential damages could be enormous.

The policies that the NFL purchased are "occurrence policies," so called because they cover liability stemming from an incident that occurred during the policy period. The NFL purchased these policies from the 32 companies for a few years at a time, starting in 1968.

The league is essentially saying that the insurance companies should cover damages because the players' concussions happened while the policies were in force, even if the effects of the injuries don't show up for years.

This is going to play out for years to come, but the most financially successful pro sports league could be liable for one of the most significant sports lawsuits in history. Damages could be hundreds of millions of dollars in immediate and ongoing penalties.

The suit could also require drastic changes in the sport. It will be interesting to see, in light of these events, if the NFL changes the way it addresses head injuries going forward, knowing it might not have any defensive line of its own.